AGM Statement

25 Apr 2008 07:30

Humberts Group PLC25 April 2008 25 April 2008 Humberts Group plc ("Humberts" or the "Group") AGM Statement Humberts (AIM: HUM), the national group of full service estate agents andvaluers, will this morning hold its annual general meeting, at which JohnMcLean, the Group's chairman, will read the following statement: "On 22 February 2008, at the time of our year end results, we stated that therewere cash payments due which amounted to around £3 million for the 2008financial year in respect of outstanding deferred consideration for acquisitionsmade in the previous 24 months. Also at that time, and in an update on 18 March2008, we said that we were reviewing a number of strategies which aimed tosecure the future of the business in the best interests of our shareholders,employees and other stakeholders. "I am therefore extremely pleased to report that we have made significantprogress in this regard and have today announced certain proposals which,subject to shareholder approval, we believe will strengthen the Group'simmediate financial position. A circular will be sent to shareholders shortlywhich sets out the full details of such proposals. "In summary, we have both reached an agreement with the majority of the vendorsand/or principals of those businesses with deferred considerations outstandingand we will be raising up to £2.25 million via a placing of convertible loannotes with existing and institutional shareholders. This provides us withconfidence that Humberts is now in a position where it can once again look tothe future. "Around 83% of those principals we approached within the Group which hadpayments outstanding took up our offer and have agreed to take convertible loanstock rather than cash in lieu of outstanding deferred consideration. This hightake up has given us great encouragement and we believe it will have a twofoldpositive impact on the business. The first being that it reduces the Group'sliabilities by around £2.3m which accounts for a large proportion of the Group'soutstanding financial obligations, therefore freeing up funds for workingcapital. "Secondly it has provided the principals of our regional businesses with realownership of the enlarged group and truly aligned their interests, not only withthe other offices in the Group, but also with those of other shareholders. Thiscultural change means that there are no longer 25 discrete businesses operatingwithin the Group and we believe this will have an extremely positive effect onthe dynamics of the business, allowing us to focus on our core offering ofproviding high quality and well respected regional property agency services. "We are further encouraged by the commitment from our principal shareholders whohave subscribed to the Placing and provide up to a further £2.25 million,underlining their belief in the future potential of the business." "We are also in the process of disposing of a number of assets which willprovide further cash resources for the Group. This progress has already begunwith the Group announcing, in early April 2008, the disposals of FarleyManagement Company Limited, for a cash consideration of £315,000, and of theblock management business of Farleys estate agents in South Kensington, Londonfor a cash consideration of £424,500. Current trading "The current economic uncertainty has led to a well documented slow down in theresidential housing market which has meant that we, along with our peers in thesector, are having to adjust to a tougher environment. Current difficulties inthe mortgage market lead the Board to believe that there will be littleimprovement in the volumes of residential sales for the remainder of theCompany's financial year. This is likely to severely impact the Group'sfinancial results for the remainder of the financial year. "However Humberts remains a strong brand with a reputation for offering aquality service which is becoming increasingly important to our customers intougher markets. In addition, we are a diversified Group which not onlyoperates in the residential sector but also encompasses professional services,fine art and commercial businesses, as well as rural and land sales, the latterof which continue to be active and where prices remain robust. These factors,combined with our improved financial position and the support we have receivedfrom our principal shareholders, managers and staff, give me great confidencethat we are able see this through until market conditions improve and we canstart once again to focus on real growth and the delivery of shareholder value. For further information, please contact; Humberts Group PLC: 020 7491 8888John McLean, Executive Chairman Panmure Gordon (UK) Limited: 020 7459 3600Grant Harrison/ Mark Lander Financial Dynamics: 020 7831 3113Richard Sunderland/Laurence Jones This information is provided by RNS The company news service from the London Stock Exchange